Thread: The credit crisis made simple

So using the video info, I think I now understand what is happening in Citigroup. The three bins are premium, common, & risky(writedowns). The first bin filled was the premium shares, then the common and if lucky the risky. Now the government is coming in and asking the shareholders to convert their premium shares to common and Citi will writeoff the risky leaving one set of shares - common. Citi will have cleaned their books and simplified their share holdings allowing for transparency and (hopefully) growth in the future. Sounds good to me. It spreads the risks to everyone who now owns the common shares. Only one asset class.

Will it work? and Can it work for other financial companies?

Originally Posted by malyla

So using the video info, I think I now understand what is happening in Citigroup. The three bins are premium, common, & risky(writedowns). The first bin filled was the premium shares, then the common and if lucky the risky. Now the government is coming in and asking the shareholders to convert their premium shares to common and Citi will writeoff the risky leaving one set of shares - common. Citi will have cleaned their books and simplified their share holdings allowing for transparency and (hopefully) growth in the future. Sounds good to me.

Will it work? and Can it work for other financial companies?

It gives me confidence. But thats something thats lacking among investors.
Maybe in time, the results can be seen and the Company can start to
recover. How Long; is the burning question for me !

Originally Posted by malyla

http://www.wimp.com/badtime/

simple as mud.

Good Vid..Thanks..explains it simply, even I understand ..

Here are the complete two videos and links
Part 1


Part 2


http://crisisofcredit.com/
http://jonathanjarvis.com/crisis-of-credit